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 A proposal to eliminate a vital barrier between state lawmakers
and middle-class income tax hikes cleared its first hurdle in the Illinois House
of Representatives.
The Illinois House Revenue & Finance Committee voted 9-6 May 20 to approve
Senate Joint Resolution Constitutional Amendment 1, which would scrap the
state’s constitutional flat tax protection and allow for a graduated, or
“progressive,” state income tax system.
SJRCA 1 can now move to the House floor for a full vote, where 71 “yes” votes
would place a progressive tax referendum question on Illinois voters’ ballots in
2020.
 Those speaking in support of the progressive tax made multiple pleas to “let
voters decide” whether to opt for Gov. J.B. Pritzker’s preferred progressive tax
amendment. But sending this amendment to voters on the false premise of fixing
the state’s problems is no way to treat Illinoisans suffering under a laggard
economy and persistent tax hikes. Further, voters have already made their voices
heard to their representatives. In six House districts held by Democrats,
polling shows more opposition than support for switching the state to a
progressive income tax among likely voters.
If state lawmakers truly wished to amplify voters’ voices, popular ideas such as
term limits, redistricting reform and pension reform would similarly be on the
table. These were left unmentioned by progressive income tax proponents in
testimony.
Progressive tax pain
The Illinois Senate passed SJRCA 1 on May 1, along with adjoining bills that
would repeal Illinois’ estate tax and enact a toothless property tax freeze, as
well as separate bill that would define graduated income tax rates should voters
approve the ballot question. The amendment that passed committee May 20 came
with none of those additional proposals.
But lawmakers need not wait until 2020 to know where Illinoisans stand on Gov.
J.B. Pritzker’s progressive tax hike. Opposition from voters and civic leaders
across the state has only intensified in the months since Pritzker pledged to
take away one of the few buffers between taxpayers’ income and lawmakers’
ability to tax it.
Leading by example, state Reps. Jonathan Carroll, D-Northbrook, and Sam Yingling,
D-Grayslake, were the latest lawmakers in the House Democratic caucus to declare
their opposition to Pritzker’s tax plan. Carroll cast a “yes” vote on the
amendment in committee, noting that he thought an issue of this magnitude
deserved debate in front of the full House. He expressed he still had serious
reservations about the proposal, and as a result his vote should not be taken as
an indication of a “yes” vote on the House floor.
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Both Yingling and Carroll correctly highlighted the
proposal’s failure to address the need for property tax relief.
Indeed, Illinois Policy Institute research found Pritzker’s promise
of middle-class income tax relief under Pritzker’s progressive
income tax plan would quickly be wiped out by rising property taxes.
That’s because the governor’s plan for a progressive income tax does
nothing to address some of the biggest cost drivers for both state
and local governments: government worker pension and health
insurance costs. Without spending reform, property tax bills will
continue to spike.
Worse yet, Pritzker already distanced himself from his promise that
his $3.4 billion tax hike would deliver income tax relief to most
Illinoisans. Less than a month after launching his “fair tax”
campaign, the governor watered down his promise to cut taxes for 97%
of Illinoisans by declaring instead not to raise them. He downgraded
his promise further in April, telling ABC 7 there were “no
guarantees” the middle class would be protected from income tax
hikes under his plan.
In fact, research from the advocacy group leading Pritzker’s
progressive tax push shows the middle class would be the
socio-economic group most exposed to tax hikes under such a system.
When progressive tax states raise income tax revenue – the purpose
of Pritzker’s plan – the middle class disproportionately suffers,
their research showed.
Promises the governor hasn’t abandoned have been challenged by
professional fact-checkers. PolitiFact, in partnership with the
Better Government Organization and Chicago Sun-Times, rebuked
Pritzker’s claim that progressive tax state economies grow faster
than flat tax ones. PolitiFact also labeled “mostly false”
Pritzker’s earlier claim that progressive tax states generally tax
the wealthy at a higher rate.
Without addressing the structural spending problems that have led to
the highest overall tax burden in the nation, a progressive income
tax system would only be a bridge to higher income taxes.
And by how quickly Pritzker’s “fair tax” promises have receded, it
has become clear to taxpayers the ease with which income tax rates
could rise under the governor’s plan. Instead, Pritzker should
follow a responsible roadmap to tax relief and restored fiscal
health through constitutional pension reform.
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